NEW YORK -- Randall's Food Markets, Houston, said here last week it is on schedule to be self-distributing by the end of the summer -- a move that will save the company between $20 million and $25 million annually, according to Randall Onstead, chairman and chief executive officer.
Speaking at last week's annual Food & Drug Retailing Conference sponsored by Donaldson, Lufkin & Jenrette here, Onstead said Randall's has already begun its transition from total dependence on its longtime supplier, Oklahoma City-based Fleming Cos., and expects to complete the process by Aug. 31.
He said the company has been shipping more than 2,000 stockkeeping units of dry groceries from its new 975,000-square-foot Dallas-based distribution center since Jan. 29 -- products it had previously been receiving from Fleming and shipping from a smaller Dallas facility.
Randall's expects to begin receiving perishables at the new facility this week and will start receiving and shipping its own products from the Dallas facility March 15, Onstead said.
In Houston the company is adding 470,000 square feet to a 215,000-square-foot facility, including 400,000 square feet for dry groceries and 70,000 square feet of freezer space. Onstead said the company will begin shipping Fleming-supplied products from that facility March 10 and will begin shipping its own products May 3.
In other remarks to the DLJ conference, Onstead said he sees "definite growth opportunities" in Dallas over the next three to five years -- despite the 10-store entry there next year of H.E. Butt Grocery Co., San Antonio.
"We've been aware of their intentions to enter that area for 10 years," Onstead said.
In a separate press release, Randall's said sales and earnings rose for the second quarter and 28 weeks ended Jan. 9. Randall's sales were up 8.2% to $627.6 million for the 12-week quarter and 7.3% to $1.4 billion for the first half, while comparable-store sales rose 7.2% for the quarter; the company did not report comps for the year to date.
Randall's said net income was up 43.8% to $11.3 million for the quarter and $68% to $19.5 million for the half.